Bitcoin slips to 10-day lows amid fears of stricter regulations among Biden – National

Bitcoin slumped 10 percent to a 10-day low before recovering some of its losses on Thursday amid traders fearing tighter US regulations.

The world’s most popular cryptocurrency, Bitcoin, recently lost 10.6 percent to $ 31,724. It lost about 27 percent of its value after hitting a record $ 42,000 on Jan. 8.

The retreat comes amid growing concerns that Bitcoin is one of several financial market price bubbles.

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Fears that U.S. President Joe Biden’s administration might attempt to regulate cryptocurrencies have also weighed on sentiment, traders said.

During a Senate hearing on Tuesday, Janet Yellen, Biden’s election as head of the U.S. Treasury Department, raised concerns that cryptocurrencies could be used to fund illegal activities.

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“I think many are mainly used for illegal funding, at least in terms of transactions, and I think we really need to look into how we can limit their use and ensure that money laundering does not take place through these channels,” said the former chairman the US Federal Reserve.

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1:37The grocery store owner is taking action as the bitcoin machine is being used repeatedly to pay scammers

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Joseph Edwards of cryptocurrency broker Enigma Securities said those comments had a significant impact.

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“Action over the past 36 hours or so has largely turned outward from Janet Yellen’s comments on crypto,” he said, adding that it was still unclear what action, if any, the Biden government would take.

“However, we think it’s probably still just a swing weakness and not a major change,” he said.

The declines are due to signs that more institutional investors are taking steps to invest in the cryptocurrency.

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BlackRock Inc, the world’s largest wealth manager, plans to add Bitcoin futures to the list of eligible investments for two of its funds, company filings on Wednesday revealed.

Other asset managers are likely to follow in BlackRock’s footsteps and increase exposure to Bitcoin in their go-anywhere or macro strategies as the cryptocurrency market continues to develop, said Todd Rosenbluth, director of mutual fund research at investment research firm CFRA.

“It’s easy to see how strong the performance has been lately and to look at a historical asset allocation strategy that would have included a piece of crypto and how it would have improved returns,” he said. “Large institutional investors will be able to tap into the futures market in ways that a retail investor could not.”

There are currently no US-based exchange traded funds that offer direct exposure to Bitcoin.

(Reporting by Julien Ponthus and Tom Wilson Editing by David Goodman and Aurora Ellis)

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